We've all seen those home-flipping shows on cable TV, where a cute young couple turns a run down house into a dream home -- and makes money doing it.
HGTV's "Flip or Flop" and similar shows have made flipping houses a national obsession. People are snapping up inexpensive older homes, installing new granite countertops and kitchen cabinets, painting the walls and then reselling them for a profit.
But some buyers of freshly flipped homes say their dream home became a nightmare.
Thousands of dollars in repair costs
One woman says her flipped home turned out to be a real flop that is now costing her thousands of dollars in repairs.
Jennifer Bachler says ceilings are cracking and collapsing in several rooms of her rehabbed home, whih she bought two years ago from a couple of home flippers.
Visitors are greeted by bare beams in the foyer, after "my ceiling in my entryway caved in," Bachler explains.
In her master bedroom closet, plaster falls on her clothing, she says "and I have to clean it up every day." Ceiling plaster is also falling in her bathroom, where the new cabinet drawers are also falling apart.
Bachler says the more she looks, the more signs of patching she finds everywhere. It appears the house was made presentable for a sale, but not much more.
"I've spent $5,000 on repairs," she said.
An inspector has told her that she needs a new $7,000 roof because it's sagging in spots, indicating rotting beams beneath it (there is no open attic where roof beams could be inspected).
"Masked Money Pits"
A recent CNBC report says complaints like these are common with homes flipped by amateurs. CNBC calls them "masked money pits."
It says inexperienced buyers, often a young couple with very little rehab experience, spruce up dilapidated homes without paying much attention to what you can't see, such as the roof, wiring, plumbing, and foundation. Some home inspectors call this "putting lipstick on a pig."
So how can you protect yourself? CNBC and the American Society of Home Inspectors say:
- Before buying, hire a top-rated local home inspector. Check his reviews on Yelp, Angie's List, the Better Business Bureau and other sites. Never use an inspector provided by the seller.
- Make sure a licensed contractor did the electrical and plumbing work, and got all necessary permits. Electrical work should never be done by amateurs with no proper training or license.
- Check to see that the rehab passed a county or city inspection, and has all the necessary permits.
Bachler figures that two years into her troubles, she is just going to have to continue paying to fix what the flippers did wrong.
"This house is my dream house," she said. "And here I am with all these problems. It's pretty bad."
We have tried to reach the couple who flipped her house, but have yet to speak with them. It probably would not make any difference, however, because you cannot return a bad home. And it's very tough to get a seller to fix anything after the sale, without suing them.
So do your homework before you buy a flipped house, so you don't waste your money.
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